Samson Lift Technologies, LLC v. Jerr-Dan

The opinion of the court was delivered by: Sylvia H. Rambo United States District Judge

MEMORANDUM

Before the court is Defendants', Jerr-Dan Corporation ("Jerr-Dan") and OshKosh Corporation ("OshKosh"), motion to partially dismiss Plaintiff's complaint. For the reasons that follow the motion will be granted in part and denied in part.

Plaintiff in this case is Samson Lift Technologies, LLC ("Samson"), a Delaware based company with a place of business in Florida. (Compl. ¶ 3.) The first Defendant is Jerr-Dan, a Pennsylvania based corporation, and a leading manufacturer of towing and recovery equipment, including a range of light, medium, and heavy duty carriers and wreckers. (Id. ¶ 4.) OshKosh, the second Defendant and Jerr-Dan's parent corporation, is based in Wisconsin. OshKosh specializes in designing, manufacturing, and marketing commercial, fire, emergency, and military trucks. (Id. ¶ 5.) OshKosh sells to governmental and private entities both domestically and abroad. (Id.)

2. Licensing Agreement

Sometime in June of 2004, Samson acquired ownership of a patent which related to the "use, manufacture, marketing, advertising, sale, distribution and provision of a [side-loading vehicle retriever]." (Id. ¶¶ 1, 15.) A side-loading vehicle retriever ("SLVR") is an advanced piece of tow truck technology which allows a tow truck to pull along side a parked car - as opposed to in-front of or behind - and, by lowering and extending forks can extract the vehicle from the parked spot without any damage to the parked vehicle. (Id. ¶ 16.) Although used in other countries for over a decade, this technology has yet to be used in the United States. (Id. ¶¶ 1, 15.) Samson acquired a U.S. Patent for this technology; however, it did not have the capability to manufacture it in the United States, as such, Samson set out to find a company in the U.S. that could properly manufacture the SLVR. (Id. ¶ 17.)

Sometime in 2003, Samson began negotiations with two major tow truck manufacturing companies - Jerr-Dan and a company named Miller. (Id. ¶ 18.) Samson received a manufacturing proposal from each company. The Miller proposal stated that it would manufacture, market, and sell around fifteen SLVRs within one year of entering into the agreement. By contrast, the Jerr-Dan proposal stated that they would manufacture, market, and sell 350 SLVRs, but would require two years to do so. (Id. ¶ 19.)

Prior to entering into a Licensing Agreement with Samson, Jerr-Dan made specific promises regarding the manufacturing of SLVRs, which included: beginning to manufacture the SLVRs shortly after entering into the Licensing Agreement; statements what SLVRs would be ready for sale by the annual American Towman Exhibition in 2004; assurances that Jerr-Dan had the proper resources to quickly manufacture and distribute SLVRs; statements that Jerr-Dan would actively use its resources to manufacture and distribute SLVRs; and, that after entering into the Licensing Agreement, Jerr-Dan would promptly enter into a Distribution Agreement with Sampson. (Id.)

In addition to making specific promises, Samson alleges that Jerr-Dan also withheld relevant information from Samson, specifically, that: it actively wished to exploit its own products; it planned on obstructing the relationship between Samson and Jerr-Dan; it had no plans on making more than a few SLVRs; it never intended for Jerr-Dan staff to receive a commission for the sale of SLVRs; it never intended to form a marketing or sales plan for SLVRs; it planned on sabotaging Samson's marketing by bringing substandard or defective equipment to sales demonstrations; it planned on submitting an application for an SLVR that would compete with Samson's or would use improvements which Jerr-Dan learned of by manufacturing Samson's SLVR. (Id. ¶ 20.)

The Agreement contained an exclusivity clause wherein Jerr-Dan promised "to make reasonable efforts to manufacture, advertise, sell and ship" 350 SLVRs within the first two-years, and 350 for every year after that. If Jerr-Dan was unable to meet these targeted goals, Samson was free to turn the exclusive license into to a non-exclusive license and shop around for manufacturers. (Id. ¶ 30.)

In addition to the exclusivity clause, was an improvements clause which greatly detailed the rights of each party should any improvements be made on the SVLR's design. (Doc. 24-2, Licensing Agreement, Art. 5, at 6 of 12.) Specifically, any improvements made to the SLVR by Defendants would be the property of Defendants, except that Samson would retain certain non-exclusive rights. (Id. at art. 5.1, at 6 of 12.) Defendants were to provide written notice of any improvements made. (Id.) Any improvement made by Samson were to be the property of Samson, with Defendants retaining the same rights as they had under the other articles of the Agreement. (Id. at art. 5.2.) The improvements clause also contained other provisions not immediately applicable to the causes of action currently before the court.

Based on the representations by Jerr-Dan, and unaware of the omissions, on June 16, 2004, Sampson and Jerr-Dan entered into an agreement (the "Initial Agreement"). (Id. ¶ 22.) However, by this time OshKosh had taken over Jerr-Dan and the Initial Agreement had to be modified. These changes were made near OshKosh's principle office in Wisconsin, and involved Sampson's right's to the the SLVR Patent. (Id. ¶ 23.) The final license agreement (the "License Agreement") was executed on July 22, 2004. (Id. ¶ 24.) This meant that Jerr-Dan had until June of 2006, "to make reasonable commercial efforts to manufacture, advertise, sell and ship" 350 SLVRs. (Id. ¶¶ 28, 31.)

3. Failure of the Licensing Agreement

As is evidenced by the current litigation, the parties' relationship did not go as planned. First, Jerr-Dan failed to have any of Samson's SLVR's ready for the November 2004 American Towman Exhibition as had been previously promised. (Id. ¶ 32.) However, Jerr-Dan did introduce at this show its own tow truck model which had some of the same benefits as Samson's SLVR. (Id.) After this missed deadline, Jerr-Dan promised to have a revised time-line for marketing the SLVR by January 2005. (Id. ¶ 33.) It is unclear when this revised time-line was released, but when it was it indicated that the SLVR would not be marketable till April 2005.*fn2 (Id. ¶ 33.)

Samson claims that the above events constituted fraudulent misrepresentations due to the following three promises: first, that a product would be available for the November 2004 American Towman Exhibition; second, that a new project plan would be in place in January 2005; third, that a new project plan was not put into place until January or February 2005 and this plan stated that a product would be available for the April 2005 Florida Tow Show. (Id. ¶ 34.)

On December 1, 2005, OshKosh filed a provisional application for a patent for a SLVR similar to Samson's. OshKosh's application included pictures of Samson's SLVR. (Id. ¶ 36.) Samson contends that Jerr-Dan, and implicitly OshKosh, were required to give written notice to Samson because it involved an "improvement" of Samson's SLVR as ...

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